I have been asked many times by our community to define the goal of innovation.
Since innovation became a buzzword in every industry, I find there can be confusion about the objectives of innovation and what is considered to be innovative and what is the role of the people who lead innovation processes in their organizations.
In this article, I discuss the goal of innovation and suggest a practical definition that could also serve as a framework for adjusting your organization’s innovation efforts.
In my view, the goal of innovation is:
Devising a non-obvious solution that delivers an accessible, cost-effective outcome for the customer, that improves their situation.
Let’s break this definition down:
1. Innovation starts with a problem.
Innovation should be measured, at first, according to the significance of the problem that we wish to solve. The number 1# reason behind most startup failures is that there was no market need for their product. Think about it from a philosophical perspective: in a perfect world where all of our problems are solved and our needs are satisfied, there wouldn’t be demand for new products or innovation that would make our lives better. Innovation happens when there is a real problem to solve. For this reason, many innovative solutions arise after crises, i.e. a whole new problem, or suite of problems, emerges during and after the crisis.
In the image above we see a turntable with a vinyl record and a pickup arm. This innovation started life as a bakelite record on which were first made around 1900 and were etched for a pickup needle and called a Gramophone. We know that the initial innovation was iterated over decades and delivered sound improvements of a 1000x over the original innovation. That innovation was in turn replaced by the MP3 player that digitized sound-waves and completely replaced the vinyl record and turntable player. Finally Apple Computer innovated on the MP3 solution in 2001 and designed a portable device that is still incorporated in the functionality of smartphones in 2020.
2. Innovation needs to improve the end-user’s life.
In many cases, a new product or service that is adopted widely by its end-users signals that it is innovative. It means that you do not have to be a rocket scientist to create innovation. If the end-user’s life is simpler than before, it doesn’t matter if the solution is based on sophisticated technology, a simple mechanism or a change to a process. Depending on your product, end-users could be individuals, corporates, governments, or every other person that uses a specific solution.
3. Innovation is relative to the end-user.
Imagine you visited an island where the residents are using only landline phones. If you introduced them to the first generation of mobile phones that enable them to communicate remotely from every place on the island, it would be innovative for them. It doesn’t matter that in other places people widely use smartphones already. If communication between people was a problem before and now it enables greater flexibility thanks to the introduced solution, then we brought innovation to the island. Innovation is relative to the end-user’s status.
In light of this, the connection between significant challenges and accessible solutions is the goal of innovation. Other options can create innovative solutions, yet they won’t stand the test of time: a complex solution for a minor challenge will be inefficient or cost-prohibitive since the solution demands greater effort for a problem that doesn’t have a significant detrimental effect on users. In the case where the suggested solution is simple to use, yet the problem is minor, it will be ineffective due to the relative unimportance of the problem. Moreover, developing a complex solution for a significant problem will be unsustainable since users will not repeatedly use a product that places high demands on their time and effort.
I would like to share two examples from the automotive industry to demonstrate the difference between innovative versus unsustainable solutions. Better Place was a promising company that developed battery-charging and battery-switching services for electric cars. The company dealt with a significant global problem — gasoline is costly for drivers and causes significant air pollution. The solution seemed to create an alternative to this significant problem. However, one of the reasons that led to the closure of the company in 2013 was the complexity of the solution for the drivers (end-users); the driving range was very limited (100–120 km) and demanded drivers to charge the battery in special stations located in secondary roads.
Conversely, Moovit, which was acquired a few weeks ago for $900 million by Intel, solved the significant problem of public transportation navigation. By developing a simple, user-friendly app for commuters that provides route navigation based on real-time location, the app reached over 800 million users and provide services in 100 countries.
Finally, one note about pricing. Affordability indeed has a direct influence on the level of adoption of the solution by end-users. However, it remains a secondary issue. Cheap products that solve minor problems may not necessarily be purchased and expensive solutions may be adopted widely if they solve essential problems. Affordability doesn’t create innovation — it increases the chances of adopting the new innovation.
Innovation doesn’t happen at once. It is more often a process that starts from complex solutions lead by different people from different organizations until it is mature and ready to create impact and find a market.
Innovation can be commercially successful if it is based on a real problem and improves quality-of-life, it has the ingredients to be widely adopted.
Innovation: Devising a non-obvious solution that delivers an accessible, cost-effective outcome for the customer, that improves their situation.